The month of June is the time when nearly every department and specialty store offers markdowns on the prices of merchandise. Brooks Brothers, Saks Fifth Avenue, Thomas Pink, Bergdorf Goodman, Bloomingdales and Lord & Taylor are offering discounts of as much as 50 percent off. With major bankruptcies in national and local retailers, rents have dropped and continue to drop in selected markets in New York City. Nevertheless, retailers are continuing to sign leases for retail locations.
Joanne Podell, a broker at Cushman & Wakefield, said “despite weaker retail sales, both national and local retailers continue to seek opportunities in New York City. With lower asking rents by landlords, there are tenants who in the past have not considered operating in New York [that] are visiting this market.”
With the exception of Retail Locations On Fifth Avenue and Broadway in Soho, and Times Square, rents are down between 20 to 30 percent, according to several retail brokers. Landlords are much more aggressive in offering tenants money for tenant improvements and build outs and in certain cases, free rent concessions of six and nine months. “This is not the case in prime markets,” Podell said.
Finally, after many years seeking a location in Manhattan, Nordstrom’s off price discount division Nordstrom Rack is in lease execution in Union Square for a portion of the Virgin Megastore. Best Buy has signed a lease to replace the bankrupt Circuit City.
Italian food specialty store, Eataly is opening its first retail store in America, in the former Cipriani space located in the old Toy Building at 200 Fifth Avenue.
Even though one of the most sought after locations on Fifth Avenue is the former home of Brooks Brothers at 666 Fifth Avenue, there have been no finalizations of new transactions for the site. Adjacent to the Brooks Brothers site is the former home of Hickey Freeman, which has been leased to Abercrombie & Fitch Kids retailer. Brooks Brothers is relocating from 666 Fifth Avenue to the former French Connection site at 1270 Avenue of the Americas.
The Slurpee and Big Gulp beverages and Big Bite hot dogs are the beloved brands of 7-Eleven stores. In the fall, 7-Eleven will open its fifth Manhattan location on Sixth Avenue near 14th Street. According to the trade, the tenant is paying approximately $125 per square foot.
Banks are continuing to seek locations in Manhattan. Canadian TD Bank, one of the strongest financial instuitions in the world, continues to expand in U.S. Before the end of the summer, the bank will be opening a new location in the base of Jack Resnick & Son’s, 880 Third Avenue at the corner of 53rd Street. Construction is progressing on a TD site in the former Duane Reade at the corner of 57th Street and Broadway. Sovereign Bank recently opened in Vornado Realty Trust’s 1290 Avenue of the Americas, in the former Sam Goody store. JPMorgan Chase is opening a major branch on Broadway and 61st Street in the base of the luxury condo 15 CPW, home to Best Buy and West Elm.
Michael Stoler is a columnist for The Real Deal and host of real estate programs “The Stoler Report” and “Building New York” on CUNY TV and on WEGTV in East Hampton. His radio show, “The Michael Stoler Real Estate Report,” airs on 1010 WINS on Saturdays and Sundays. Stoler is a director at Madison Realty Capital as well as an adjunct professor at NYU Real Estate Institute, and a former contributing editor and columnist for the New York Sun.